According to a report from the Wall Street Journal, "Discount airlines are taking off in Latin America, one of the last big untapped markets, transforming transportation there by enticing an emerging middle class off buses and onto planes.
The new low-cost carriers in Brazil, Mexico and Colombia are largely avoiding competition with incumbent full-service airlines. Instead, they are stimulating new traffic by adding cheap, no-frills flights to secondary cities that, for many residents, had long required day-long bus rides.
The new low-cost carriers in Brazil, Mexico and Colombia are largely avoiding competition with incumbent full-service airlines. Instead, they are stimulating new traffic by adding cheap, no-frills flights to secondary cities that, for many residents, had long required day-long bus rides.
Largely as a result, the number of airline passengers in these countries has surged. The newfound mobility has opened up the flow of commerce and drastically cut travel times in areas with poor roads, virtually no rail service and stretches of harsh terrain.
In Latin America, government regulation, poor airport infrastructure and the dominance of flag carriers kept airfares high and relegated the vast majority of the population to hours-long bus rides. But now the region is fertile ground for discount carriers, with rising wages, government support, improving infrastructure and the failure or consolidation of some of the region's biggest full-service carriers.
Latin America has six low-cost carriers, compared with 22 in Southeast Asia, but the airlines' share of seats in Latin America has increased to nearly a third this year from less than 10% in 2005, according to the Centre for Aviation, a Sydney-based research firm.
The expansion of discounters is expected to help fuel the rapid growth of the region's aviation market. Boeing Corp. forecasts that air traffic within Latin America will nearly quadruple over the next two decades, compared with a 100% increase in Europe and a 57% increase in North America".
